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Fleet operator Wincanton, already heavily involved in the retail, manufacturing,
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petroleum and bulk foods sectors, has established itself in the reverse logistics market, "Traditionaily, it has been about forward supply chains going outwards," says Gareth Smith, general manager, business development. 'Now, firms
realise there are opportunities to be taken in reverse logistics."
In 2002, Wincanton personnel visited the United States to examine reverse logistics processes. They studied the operation of Genco, a fleet operator. They had a bloomin' good solution," Smith recalls. Wincanton launched its reverse logistics service in 2003 and its returns are "sometimes manufacturer issues, such as design faults, or errors in a batch". Mail-order catalogue companies have generous returns policies, adding to the quantity of goods ready to travel.
Smith explains how it works: "A catalogue company has, say. five different sites, or RDOs. Our trucks visit these sites, then carry out trunks and multi-drops to the customers. If a customer finds a fault, or does not want the goods, they send them back." Significantly, involvement in this up-andcoming sector does not necessarily call for expanding the existing infrastructure. "On the catalogue side," says Smith, "customers send items back by parcel post."
No need to expand
Wincanton does transfer goods from high-street retailers to manufacturers, but you don't need to expand your operation dramatically to reap the rewards. "It does not have to be a labour-intensive operation, due to the higher value of the job, ' says Smith. Like consultant Roy Attenborough, Smith brings up the subject of jobbers: "Following the traditional model, the retailer bought from official manufacturer channels. These purchase agreements usually included a 'return to manufacturer' (RTM) clause, under which the retailer could return faulty goods to the manufacturer, with a full refund." But there has been a shake-up: "The increasing trend in retaileT purchasing is for goods to be sourced from 'unofficial manufacturer agents' (what Salvesen refers to as jobbers) rather than the manufacturers direct. This is sometimes referred to as the 'grey market',"
VVincanton has developed a network of jobbers so unwanted stock can easily be moved on. The fleet operator never takes ownership of the consignments; instead, the retailers pay commission to the firm for handling and moving the goods on to the jobber. Payments are made according to the value of the load, so Wincanton can expect to make a decent profit from, say, an expensive cooker.
The challenge, says Smith, is ensuring that you know exactly where the goods are going: "The biggest problem with return logistics is not how to get the goods back, but knowing what to do with them. It's a very different game from normal, outgoing logistics."
But it's here to stay-Smith sees reverse logistics as a central part of Wincanton's portfolio rather than a mere sideline. "This is not value added," he stresses. "it's a core part of our activity." And it's a part that is set to expand -the company plans to invest in extra warehousing so it can take on even more returns.